SB244 Alabama 2013 Session

Summary

Primary Sponsor

Gerald O. Dial

Republican

Co-Sponsors

Cam WardJ.T. WaggonerGerald H. AllenDick BrewbakerDel MarshShadrack McGillJerry L. FieldingTom WhatleyJimmy HolleyScott BeasonBryan Taylor

Session

Regular Session 2013

Title

Ad valorem tax, homestead exemption from local taxes, disabled and person over 65, exemption restored for disabled without regard to income, exemption for persons 65 and over further provided for based on state taxable income, effect to substantially repeal Act 2012-313, 2012 Reg. Sess.; Sec. 40-9-21.2 added, Secs. 40-9-19, 40-9-21, 40-9-21.1am'd.

Description

Under existing law, certain homestead exemptions provided for persons age 65 or over and persons permanently and totally disabled were amended by Act 2012-313.

Prior to Act 2012-313, a person age 65 or over or permanently and totally disabled was exempt from all state ad valorem taxes. This exemption was not changed by Act 2012-313.

Prior to Act 2012-313, a person age 65 or over was entitled to two other exemptions from other local ad valorem taxes based on income limits. If the person age 65 or over had net taxable income for federal income tax purposes of $7,500 or less, the homestead was exempt from all ad valorem taxes.

Act 2012-313 increased the income limit on this exemption to $12,000.

In addition, if the person did not qualify for the above exemption, but had an adjusted gross income of $12,000 or less for state income tax purposes, the homestead was entitled to a special exemption of $5,000 in assessed value on the county portion of taxes instead of the regular exemption of $2,000 in assessed value on the county portion of taxes.

Pursuant to Act 2012-313, this special exemption was deleted.

Under existing law prior to Act 2012-313, based on an opinion of the Attorney General in 2005, a person permanently and totally disabled was exempt from all other ad valorem taxes without regard to any income limit. Prior to the opinion, the exemption was subject to the same federal income tax limitation as discussed above for persons age 65 or over.

Act 2012-313 specified that the exemption was subject to the same income limits as provided for persons age 65 or over.

This bill would amend the existing code provisions providing exemptions as discussed above as amended by Act 2012-313 to restore the provisions in the exact same form as they existed prior to Act 2012-313 with two exceptions: the net federal income tax limitation for persons age 65 or over would continue to be $12,000 and the Department of Revenue would be authorized to further provide for evidence of eligibility other than a tax return for the exemption.

The above provisions of this act would be retroactive to August 1, 2012, the effective date of Act 2012-313. As a result, no person will have a higher local ad valorem tax liability as a result of Act 2012-313.

This bill would also prohibit a person from falsely claiming a homestead exemption and provide criminal penalties. This prohibition and these penalties were not addressed in Act 2012-313.

Amendment 621 of the Constitution of Alabama of 1901, now appearing as Section 111.05 of the Official Recompilation of the Constitution of Alabama of 1901, as amended, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless: it comes within one of a number of specified exceptions; it is approved by the affected entity; or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose.

The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment. However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment.

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Subjects

Tax